Li Auto (LI) delivered stronger-than-expected first-quarter earnings for 2025. However, the upbeat results were overshadowed by disappointing guidance for second-quarter, which came in below analysts’ forecasts. Following the announcement, the company shares on the Nasdaq fell over 3% in pre-market trading.
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For Q2, Li Auto projected revenue in the range of ¥32.5 billion to ¥33.8 billion, falling short of the market consensus of ¥34.7 billion. Meanwhile, the company also expects to deliver between 123,000 and 128,000 vehicles, slightly below analysts’ estimates of 128,852 units.
Li Auto Delivers Q1 Profit Growth
Li Auto reported a 9.7% increase in net profit to ¥650.3 million for the quarter, topping the ¥488.3 million forecast from analysts polled by Visible Alpha. At the same time, the gross margin held steady at 20.5%, nearly flat compared to 20.6% a year earlier and slightly above the 20.3% posted in the previous quarter.
Moreover, revenue inched up 1.1% year-over-year to ¥25.93 billion ($3.6 billion), narrowly surpassing market expectations of ¥25.28 billion.
Overall, the company delivered 92,864 vehicles during the quarter, landing comfortably within its projected range of 88,000 to 93,000 units.
Chinese EV Makers Struggle amid Fierce EV Rivalry
Chinese electric vehicle makers are facing mounting pressure as competition intensifies in the world’s largest auto market. To reignite sluggish consumer demand, automakers have been slashing prices — with industry leader BYD (BYDDF) cutting sticker prices by up to 34% just last week.
Despite this challenging environment, Li Auto has seen a “robust influx of orders” for its newly launched L series models, according to Chairman and CEO Li Xiang. The company is also preparing to launch its first battery electric SUV in July.
Yet, while the product pipeline looks promising, the near-term outlook remains cautious as Li Auto contends with fierce competition in China’s EV market.
Is Li Auto Stock a Good Buy?
According to TipRanks, Wall Street has a Moderate Buy consensus rating on LI stock, based on six Buys and four Holds assigned in the last three months. The average Li Auto stock price target of $33 implies an 18% upside potential.
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